As reported in the April 2014 issue of Professional Security magazine, G4S and Serco alike have changed their leadership and sought to make amends for over-billing the Government for electronic monitoring of offenders – G4S doing a deal for £108.9m. Those two companies – and the Government – came in for particular criticism in a report, on contracting out public services to the private sector, by the Public Accounts Committee (PAC).
The PAC said that the public’s trust in outsourcing has been undermined recently by the poor performance of G4S in supplying security guards for the Olympics, and described the G4S and Serco over-charging for years on electronic tagging as ‘astonishing’.
According to the committee of MPs, there is not enough effective competition in the market for government business, and central government’s management of private sector contracts has too often been very weak. As for lack of competition, and markets dominated by a very few large firms, the PAC said small and medium-sized enterprises (SMEs) are still hampered in their efforts to win government business by excessive bureaucracy and bidding costs. The committee reported: “One way in which government can avoid becoming overly reliant on particular suppliers is ensuring that different parts of a service are provided by different companies. This was not true of the electronic monitoring contracts, where G4S and Serco provided both the service and the equipment.”
As the committee pointed out, Serco and G4S charged the Ministry of Justice for services they were not providing. The PAC said that while it was ‘scandalous’ that G4S and Serco overcharged the taxpayer tens of millions of pounds for electronic tagging, and added that it was ‘shocking that the Ministry of Justice did not spot the overcharging for eight years’. The committee called for far greater visibility to government, parliament and the public about suppliers. Where contractors have failed to deliver, the penalties are sometimes not imposed and even where they are, have not always reflected the full cost to the taxpayer, the PAC said. The MPs asked that Government include a standard term in contracts requiring suppliers to have whistle-blowing policies in place. This should require contractors to nominate designated officials within departments to receive disclosures from whistle-blowers.
G4S and Serco were two of four contractors that went before the committee: giving evidence were Ashley Almanza, Chief Executive, G4S; Paul Pindar, Chief Executive, Capita; Alistair Lyons, Chairman, Serco; and Ursula Morgenstern, Regional CEO UK and Ireland, Atos.
As the committee said, Government spends £187 billion on goods and services with third parties each year, around half of which is estimated to be on contracting out services. Private contractors and government recognised the need for improvement.
Visit http://www.publications.parliament.uk/pa/cm201314/cmselect/cmpubacc/777/77702.htm
See also an article ‘Electronic monitoring: dangerous if left to its own devices’ in the March 2014 issue of the Criminal Justice Matters journal.
Visit http://www.tandfonline.com/doi/full/10.1080/09627251.2014.902191#tabModule
